- Facebook releases its details about Libra
- Bitcoin soars past most asset classes this year
- Lightning-powered Bitcoin payments app for iPhone
The world of cryptocurrencies just took a huge leap forward today as Facebook Inc. divulged details about its new stable coin and blockchain, both dubbed Libra.
Backed by a basket of fiat currencies and government securities, Libra’s token use will initially focus on international remittances – a market the World Bank says was worth around $613 billion in 2017.
The Libra blockchain is set for full deployment next year.
“The goal of this new project … is to build a financial ecosystem that can plug in and empower billions of people,” Dante Disparte, head of policy and communications for the Libra Association told CoinDesk.
The Libra Association is actually an independent consortium of 28 founding members, including Visa, Mastercard, PayPal, Uber, Lyft, Coinbase and more, that will come to govern Calibra, a new Facebook subsidiary that’ll be tasked with developing financial services and products around the Libra network. The Libra Association also has several non-governmental organizations that work on digital financial inclusion, such as Creative Destruction Lab, Kiva, Mercy Corps and Women’s World Banking.
Globally, there are about 1.7 billion adults without access to formal banking arrangements – the so-called ‘unbanked,’ who make up nearly half of the world’s adult population.
What’s more, some 70% of small businesses in developing countries don’t have access to credit. And fees for remittance services are high – $25 billion is spent by migrants each year on these fees, Calibra said.
Calibra plans on brining this group of people into the financial fold by starting out with a digital wallet for the Libra coin, which will permit users to transfer funds back and forth, as well as store their tokens.
Essentially, wherever Visa or Mastercard logo are accepted, Libra would also be accepted, Disparte said.
But that’s just the beginning.
Calibra wants to expand to let customers pay their bills and purchase day-to-day goods and services, like a bus ticket or a cup of coffee.
Perhaps even better for users, the plans so far show that users will see transfers in terms of their local fiat currency, instead of the Libra token being used behind the scenes.
Calibra will also following know-your-customer (KYC) and anti-money-laundering (AML) regulations where it conducts business.
Users will have to verify their ID, but they won’t have to have a Facebook account to use it. Nor will their financial data and social media profiles be linked, allowing users the freedom to create multiple accounts.
Check back here for more about the plans for this bold new crypto-project as they continue to develop.
But before this develops further, I have to let you know about a crypto trading research service run by my Money Morning colleague, Tom Gentile.
He and his team have developed a system to track the hottest cryptocurrencies by the week. And they’ve been crushing it.
Just yesterday, Tom recommended to sell off two cryptocurrency positions for up to a total 676% profit.
And he’s got another recommended position lined up and ready to go.
Bitcoin Still Soaring
Prices for Bitcoin (BTC) and Ethereum (ETH) climbed in recent days, and have been performing well this year thanks to a variety of positive drivers.
These include the upcoming debut of a Facebook cryptocurrency, exciting updates to Bitcoin’s Lightning Network and Bakkt’s impending testing of its Bitcoin futures contracts slated for July.
Over the weekend, Bitcoin rose back above the $9,000 mark, and reached $9,381 – a 13-month high.
It’s just a bit below that as I write to you now, but the world’s largest cryptocurrency with a market cap of $165 billion has been a tear this year.
As the Wall Street Journal just noted, Bitcoin has broken away from most other asset classes this year, rising 154% compared to the S&P 500’s 15% climb, crude-oil futures’ 16% gain and gold futures’ increase of just 4.8%.
In fact, institutional crypto prime dealer SFOX found that in May, after China said it would raise tariffs on $60 billion of U.S. goods, there was an almost perfect negative correlation between the S&P 500 and Bitcoin.
That makes it an attractive play for institutional investors like pension funds and family offices that are looking to diversify their holdings.
Indeed, JP Morgan Chase & Co. recently said Bitcoin futures contracts on the CME Group and Cboe exchanges are climbing rapidly, from $5.5 billion in April to $12 billion today – another sign institutional players are moving into the space.
Of course, these large investors are responding to a spate of exciting news for the industry.
Facebook’s launch of Libra is likely to help the broader industry in terms of infrastructure buildout, including custody solutions to better store cryptocurrencies, better wallets and improved overall compliance with existing regulations – Facebook has reportedly hired top-flight lobbyists in relation to its crypto push.
The idea here is also that Facebook and its impressive list of corporate backers are bound to offer Facebook’s 2.4 billion monthly active users an easy on-ramp to using cryptocurrencies. Once they’re more familiar, it won’t be as much of a stretch to go to others, like Bitcoin or Ethereum.
A Bitcoin Payments App Comes to iPhone
The hits just keep coming for Bitcoin’s Lightning Network.
Recall that the Lightning Network is helping realize Bitcoin’s original promise as a quicker, cheaper, and more secure daily payment mechanism. And its mass adoption is one reason behind my prediction that Bitcoin (BTC) will eventually reach $100,000.
Now we hear that non-custodial wallet and payment platform, Breez, is launching a Lightning-powered Bitcoin payments app for the iPhone on Neutrino Bitcoin Lightning software.
Now in beta, the app’s developers say they’ve figured out how to dispute purchases and receive payments so as to make just about any type of purchase possible.
After getting installed, Breez automatically opens a payment channel to the Breez hub, which is connected to other Lightning nodes, thus allowing users to transact with anyone else on the network.
If there’s a dispute, both parties can use the most recently signed balance sheet to retrieve their respective share of the wallet, according to CoinDesk.
Breez’s beta app will run on Apple Developer’s TestFlight – once it’s live, the app has the potential to reach about 98% of mobile users worldwide.
“Bitcoin has the potential to make all other mediums of exchange – including crypto and fiat currency – obsolete,” said company founder Roy Sheinfeld.
I couldn’t agree more, which is why the buildout of Lightning has been so intriguing to watch.